Chrysler Financial, once the financial arm of the new Chrysler Group LLC, will dismiss roughly 350 employees, or 9% of its work force.
More than 100 of the layoffs are effective Tuesday and will come primarily out of the company's sales teams. Another 240 will come at the end of August, when a customer call center in Kansas City, Mo., will be closed, the company confirmed.
Chrysler Financial, which effectively ran out of money to lend this spring, cut 2% of its workforce earlier this year and is in the process of winding down its operations.
In an online broadcast to employees Tuesday, top executives at the company told employees to expect even more layoffs in the future, said people familiar with the matter.
Chrysler Financial is owned by Cerberus Capital Management, LP. The private equity firm's stake in Chrysler LLC, now the Chrysler Group, was wiped out in bankruptcy.
Chrysler Financial has a portfolio of outstanding loans to dealers and consumers worth around $45 billion to manage, according to a statement the company issued on Tuesday. Two months ago, the company said its portfolio was worth $50 billion. The layoffs disclosed Tuesday come amid declining auto sales and a tight credit market. It also comes after Chrysler dropped Chrysler Financial as its preferred lender in favor of GMAC LLC.
"While these were difficult decisions to make, they are necessary in light of our declining portfolio," Tom Gilman, Chrysler Financial's Chairman and CEO, said in a statement.
The layoffs affected all eight of the company's business centers and its corporate headquarters in Farmington Hills, according to the company.
Among other changes announced: the company's national retail operations will be consolidated into one Auburn Hills, Mich., office and sales people will be shifted to manage dealer credit as the company collects on old loans.
"We're not holding our breath for any type of rebirth of the company," a person familiar with the matter said. "We all know the company is in liquidation."
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